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200506599 (C) Calculation of Changes At each Interest Rate Change Date, the Note Holder will calculate my new interest rate by adding Two And One -half percentage points ( 2.500% ) to the Current Index. The Note Holder will then round this figure to the nearest one -eighth of one percentage point (0.125 %). Subject to the limit stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Interest Rate Change Date. (i) Interest -Only Period. The "Interest -only Period" is the period from the date of this Note through August 1, 2007. For the Interest -only Period, the Note Holder will calculate the amount of the monthly payment to be one - twelfth (1 /12th) of one (1) year's interest at 7.425 % per annum. The result of this calculation will be the amount of my monthly payment until the Interest Rate Change Date. (ii) Amortization Period. The "Amortization Period" is the period after the Interest -only Period and continuing until the Maturity Date. During the Amortization Period, after calculating my new interest rate as provided in Section 4(C) above, the Note Holder will then calculate the amount of the monthly payment that would be sufficient to fully repay the remaining unpaid principal in equal monthly payments by the Maturity Date, assuming, for purposes of each calculation, that the interest rate remained unchanged during that period. The result of this calculation will be the new amount of my monthly payment. (D) Limit on Interest Rate Changes The interest rate I am required to pay at the first Change Date will not be greater than 8.925% or less than 7.425 %. Thereafter, my interest rate will never be increased or decreased on any single Change Date by more than one and one half percentage points (1.5 %) from the rate of interest I have been paying for the preceding month. My interest rate will never be greater than 14.425 % nor less than 7.425 %. (E) Effective Date of Changes My new interest rate will become effective on each Interest Rate Change Date. I will pay the amount of my new monthly payment beginning on the first monthly payment date after the Interest Rate Change Date until the amount of my monthly payment changes again. (F) Notice of Changes The Note Holder will deliver or mail to me a notice of any changes in my interest rate and the amount of my monthly payment at least 25 days before the effective date of any change. The notice will include information required by law to be given me and also the title and telephone number of a person who will answer any questions I may have regarding the notice. 11. GOVERNING LAW - SECURED NOTE The Note is governed by federal law and the law of the jurisdiction in which the property encumbered by the Security Instrument (as defined below) is located. In addition to the protections given to the Note Holder under the Note, a Mortgage, Deed of Trust or Security Deed (the "Security Instrument "), dated the same date as the Note protects the Note Holder from possible losses which might result if I do not keep the promises which I make in the Note. That Security Instrument describes how and under what conditions I may be required to make immediate payment in full of all amounts I owe under the Note. Some of those conditions are described as follows: NCMC 2/28 Six Month LIBOR Adjustable Rate Rider Page 2 of 3 1002777132 RE -409 (111803)